Chapter 17
International Accounting and Financial Management

True / False Questions

1. The purpose of all accounting is to provide internal and external decision-makers with the financial data they need to make their decisions.
True False

2. There are three points at which operating in a foreign currency raises accounting issues: when transactions are made in foreign currencies, when foreign subsidiaries consolidate their results to the parent company, and when debt is acquired in foreign currencies.
True False

3. FASB 52 requires that companies record foreign currency based transactions at the spot rate at the time of the transaction.
True False

4. Consolidation is when a company's various results are aggregated into one report.
True False

5. The current rate translation method translates current assets at the rate in effect when they were acquired.
True False

6. The temporal method of translation translates fixed assets at the rates in effect the day the assets were acquired.
True False

7. Whether to use the current or temporal rates depends on the functional currency of the foreign operation.
True False

8. Accounting is an objective, fact-based discipline and not influenced by culture.
True False

9. Accounting standard convergence is unlikely, given the complexities of the systems, all of which would require harmonization.
True False

10. With convergence of accounting standards, accounting statements will still need to be adjusted to be directly comparable due to varying legal requirements.
True False

11. Triple bottom line accounting is built on the assumption that capitalism can become humanized.
True False

12. The main argument against 3BL is that business is concerned with generating profit, not with